Fundamentals of Public Administration

Lecture –12 (Decision Making)

Typology of Decisions :
A. Herbert Simon : Herbert Simon, a distinguished American economist and social scientist, was a Nobel
laureate in Economics. Renowned for his work in decision-making theory and artificial intelligence, he
emphasized bounded rationality and satisficing in human decision-making processes.
• Programmed Decisions : In the domain of Public Administration, Herbert Simon's concept of
programmed decisions pertains to routine choices governed by established protocols or guidelines. These
decisions are repetitive and follow predefined rules or procedures. Common examples encompass budget
allocation processes, routine administrative tasks, and standardized procedures for handling personnel
matters. Programmed decisions facilitate efficient management by providing structured frameworks that
streamline decision-making and minimize the need for extensive analysis or creativity in these recurrent
scenarios.
• Non-Programmed Decisions : Non-programmed decisions, as per Herbert Simon's framework in Public
Administration, involve unique, complex choices lacking predefined guidelines or established procedures.
They demand creative problem-solving and judgment due to their unprecedented nature. In this realm,
public administrators face challenges such as policymaking for emerging issues, responding to crises, and
addressing novel situations like natural disasters. These decisions require adaptability and innovation,
often deviating from routine processes, demanding thoughtful analysis and strategic thinking.
Typology of Decisions :
B. Chester Barnard :
Chester Barnard was an influential American business executive and organizational theorist known for
his work "The Functions of the Executive." He emphasized the significance of cooperation, effective
leadership, and informal organizational elements in achieving managerial success.
• Organizational Decisions : Chester Barnard, a management scholar, emphasized organizational
decisions in Public Administration, focusing on collective actions within administrative systems. These
decisions revolve around achieving organizational goals by coordinating individual efforts and aligning
them with the overarching mission. They involve collaboration, communication, and consensus-
building among stakeholders to ensure effective implementation. Barnard highlighted the significance
of executive leadership, cohesive communication channels, and a shared understanding of
organizational objectives to facilitate successful decision-making and achieve optimal administrative
outcomes.
• Personal Decisions : Chester Barnard's perspective on personal decisions in Public Administration
stresses the role of individual choices within an organizational framework. These decisions encompass
the actions and choices made by individuals within the administrative structure, influencing the
organization's overall effectiveness. Barnard emphasized the importance of personal judgments,
motivations, and behaviors of administrators in achieving organizational goals. He highlighted that
these personal decisions, when aligned with organizational objectives, contribute significantly to the
efficiency and success of public administration initiatives.
Typology of Decisions :
C. Peter Drucker :
Peter Drucker, a renowned management consultant and author, was a prominent figure in
management theory. He is celebrated for his influential contributions to the field of management,
emphasizing the importance of effective leadership, innovation, and organizational
effectiveness.
• Generic Decisions : Peter Drucker, a management consultant, highlighted generic decisions in
Public Administration, focusing on fundamental choices applicable across various administrative
contexts. These decisions involve core managerial aspects such as setting objectives, resource
allocation, establishing policies, and fostering innovation. Drucker's emphasis on effective
decision-making underscores their impact on organizational performance, urging administrators
to prioritize clarity, efficiency, and adaptability in managing public institutions.
• Unique Decisions : Peter Drucker emphasized unique decisions in Public Administration,
concerning non-repetitive, singular choices pivotal for organizational success. These decisions
revolve around addressing unprecedented challenges, innovative strategies, and significant policy
changes. Drucker stressed the importance of creativity, strategic thinking, and adaptability among
administrators when confronting novel situations, advocating for flexible approaches to problem-
solving and decision-making to effectively manage the complex and ever-evolving landscape of
public institutions.
 Simon ⎯ Four steps of decision-making
Herbert Simon proposed a four-step decision-making process known as the Rational Decision-
Making Model, which involves:

1. Intelligence Phase:
- Involves identifying and understanding the problem or decision to be made by gathering
information, recognizing the need for a decision, and defining the problem clearly.
- This phase focuses on recognizing the issues, challenges, or opportunities that require a
decision-making process.

2. Design Phase:
- Involves generating potential solutions or alternatives to address the identified problem or
decision.
- Decision-makers create a range of possible courses of action and consider the feasibility,
advantages, and disadvantages of each.
 Simon ⎯ Four steps of decision-making
3. Choice Phase:
- Encompasses evaluating and selecting the best alternative from the generated options.
- Decision-makers assess each alternative against established criteria, considering the
potential outcomes and consequences of each choice.

4. Implementation Phase:
- Involves putting the chosen decision into action and ensuring its execution effectively.
- Decision-makers translate their choice into action plans, allocate resources, and monitor the
implementation process to achieve the desired outcomes.

Simon's model provides a structured approach to decision-making, emphasizing the

importance of systematically going through these steps to make informed and effective
decisions. It recognizes the iterative nature of decision-making, where feedback from the
implementation phase can influence future decisions.
Ques. "There are three conditions under which decisions are made."
Explain those three conditions in the context of Decision-making.
Ans : The statement regarding the three conditions under which decisions are made
might refer to Herbert Simon's concept of decision-making. He identified three
fundamental conditions that influence decision-making processes:
1. Certainty: This condition exists when the decision-maker has full knowledge of
all possible outcomes and their probabilities. Under certainty, the consequences of
various choices are known and can be accurately predicted. Decision-making in this
scenario involves selecting the most optimal choice based on clear information and
a predictable environment.
2. Risk: In situations of risk, decision-makers have partial information about
potential outcomes and their probabilities. While the possibilities are not fully
known, some estimations or probabilities can be assigned to potential outcomes.
Decisions made under risk involve assessing these probabilities and selecting the
course of action that offers the best balance between potential gains and losses.
3. Uncertainty: This condition occurs when there is a lack of information or
knowledge about potential outcomes, making it difficult to assign probabilities
or foresee consequences accurately. Decisions made under uncertainty
involve considerable ambiguity and unpredictability. Decision-makers rely on
judgment, intuition, and limited information to make choices that are often
more exploratory or based on heuristics due to the absence of clear data.
These conditions provide a framework for understanding the complexity of
decision-making processes and highlight how the level of information and
predictability significantly influences the approach taken to make decisions.
In real-world scenarios, decisions often fall within a spectrum encompassing
elements of certainty, risk, and uncertainty, requiring different strategies and
considerations based on the prevailing conditions.
 Herbert Simon's Means-Ends model
Simon explains rationality in terms of means-ends hierarchy.
Means- alternative courses of action.
Ends- consequences of each decision.
It is a decision-making framework that organizes objectives (ends) and actions
(means) hierarchically. It structures goals at the top level, connected to means
necessary for their attainment, forming a hierarchical relationship.
Subordinate goals or sub-means break down complex objectives into
achievable components, facilitating the decision-making process. This model
aids in systematically outlining the steps required to achieve desired outcomes,
providing a structured approach for decision-makers. By linking end goals with
the necessary means in a hierarchical structure, it enables a clearer
understanding of how actions contribute to achieving overarching objectives,
aiding in strategic planning and problem-solving within organizations.
 The Behavioral Alternative Model
The Behavioral Alternative Model in decision-making considers choices influenced by
cognitive biases and bounded rationality. It acknowledges that individuals often rely on
empirical and limited information, leading to systematic deviations from rationality. This
model emphasizes how people simplify complex decisions by considering a limited set of
alternatives and evaluating them based on personal preferences and cognitive shortcuts.
It underscores the importance of understanding human behavior and cognitive limitations
in decision-making processes, elucidating how biases impact choices within bounded
rationality constraints.
The Satisficing Model
The Satisficing Model in decision-making, coined by Herbert Simon, proposes that
individuals, constrained by limited time and information, aim for satisfactory rather than
optimal solutions. It diverges from maximizing utility and acknowledges bounded
rationality. Decision-makers seek solutions that are "good enough" to meet criteria or solve
problems, rather than exhaustively analyzing all options. This model emphasizes efficiency
in decision-making by accepting satisfactory outcomes, given the constraints, recognizing
that seeking perfect solutions might be impractical or unattainable within the given
limitations.
 Based upon Economic Man Model Social Man Model Administrative Man Model

Rationality/ Assumes individuals are Considers decision- Acknowledges the

entirely rational, self- makers as influenced by limitations of rationality due
Social Factors/ interested, and seek to social relationships, to cognitive constraints,
Bounded maximize their utility or norms, and group incomplete information,
rationality economic gain. dynamics. and time pressures.
(Rationality) (Social Factors) (Bounded rationality)

Focuses on optimizing Reflects decisions Recognizes the use of

choices by carefully affected by factual, rules of thumb, and
Decision Process weighing costs and interpersonal satisficing strategies to
benefits, making relationships, societal simplify decision-making in
decisions based on expectations, and complex situations.
complete information. cultural influences.
Primarily applied in Emphasizes the Particularly applicable in
economic theories, significance of social organizational and
Context where individuals are context in decision- administrative settings,
depicted as rational making, acknowledging where decision-makers face
actors in market-driven that individuals' choices constraints and
scenarios, making are shaped by social uncertainties, leading to
decisions solely for interactions and norms. satisficing rather than
personal benefit. optimizing decisions.